Australian Rugby Union chief executive Bill Pulver has confirmed that James O'Connor's contract with the Wallabies has been terminated with immediate effect.
The decision, which is a result of a drunken incident at Perth International Airport last month, rules the 23-year-old out of action until at least 2014.
However, Pulver stated that the winger, who was released by Super Rugby side Melbourne Rebels for repeated violations in conduct, will once again be considered for selection should he display an improved attitude.
"We are hopeful that James will stay in Australian rugby and play in next year's Super Rugby competition and that he sees this as an opportunity to re-focus his attitude and invest in all aspects of his professional rugby career," read a statement from the ARU.
"If James chooses to stay in Australia and play Super Rugby, he would be eligible to play for the Wallabies in 2014, as long as his behaviour was consistent with our expectations and if his form warranted selection."
Perth-based Western Force are believed to be the only Super Rugby side currently interested in signing O'Connor.